Disaster
Areas
Florida and Virginia

LOAN PROGRAM BULLETIN

TO:

DATE:

TOPIC:

To assure that your Common Manual
remains current, please record this document on your LPM/LPB index, and retain it in
Appendix E of your manual.

Bay, Dixie, Franklin, Gulf, and
Wakulla counties in Florida have been declared to be disaster areas because of
hurricane damage that began September 3, 1998.

In addition, the independent
cities of Chesapeake, Norfolk, Portsmouth, Suffolk, and Virginia Beach in
Virginia have been declared to be disaster areas because of hurricane damage that began
August 28, 1998.

Disaster-related Forbearance Policy

1. Loan holders are strongly recommended
to grant forbearances to borrowers who contact them and indicate that they have been
adversely affected by the disaster and need temporary relief from their loan obligations.
If the holder believes that the borrower has been harmed and needs assistance, the holder
may grant a forbearance for up to 3 months after the disaster strikes the borrower, based
on either the borrower's oral or written request for assistance, which must be documented
in the holder's files.

2. The holder does not need to obtain
supporting documentation or a signed written agreement from the borrower to justify a
forbearance for this initial 3-month period. The Secretary will decline to enforce the
requirements of 34 CFR 682.211(c) for this period.

3. A continuation of the forbearance past
this 3-month period will require supporting documentation and a written agreement from the
borrower.

We will notify you if additional areas
are designated. Questions and concerns may be addressed to the Departments toll-free
number at 1-800-433-7327, Monday through Friday from 9:00 a.m. to 5:00 p.m. EST.